Summary
This is a follow up proposal to proposal #249 and aims to complete the rollout of the updated borrow controller to all remaining FiRM markets. The updated borrow controller introduces a rolling 24-hour borrow limit to replace the previous system, which reset borrow limits at midnight (00:00 UTC). This enhancement ensures a smoother borrowing experience, mitigates risks associated with exploitability, and aligns all FiRM markets with the latest risk management standards.
Background
The borrow controller is a key risk management feature in FiRM. It regulates borrowing transactions by ensuring compliance with the following parameters:
- Market Daily Borrow Limit: Ensures borrowing does not exceed the remaining daily limit for the market.
- Smart Contract Verification: Verifies that borrowing addresses (if smart contracts) are on the whitelist.
Key Risks Addressed by the Borrow Controller
- Mitigating Exploits: Limits DAO losses in the event of an exploit and caps financial gains for attackers.
- Preventing Double Borrowing Exploits: Under the previous system, borrowers could borrow just before and immediately after midnight to exceed the daily limit.
- Ensuring Equitable Borrowing: Addresses non-linear competition by distributing borrowing capacity incrementally across a 24-hour period.
The updated borrow controller has already been successfully deployed for the PT-sUSDe-27MAR25 and select LP markets, as detailed in the initial proposal. This follow-up proposal extends the same benefits to all remaining FiRM markets, completing the standardization of borrow controls across the protocol.
Implementation
The new borrow controller logic has been rigorously tested and deployed in production by FiRM for over a month and Grace protocol for over 7 months. The updated borrow controller has undergone thorough internal and external reviews to ensure its reliability and security.
The proposed implementation includes the following actions for all remaining FiRM markets:
-
Set the Borrow Controller:
Update the borrow controller for remaining FiRM markets to the new contract which uses a rolling 24-hour limit mechanism. -
Maintain Existing Market Parameters:
The updated borrow controller will inherit the existing settings for:
- Daily Borrow Limit
- Minimum Debt
- Staleness Threshold
On-Chain Actions
- Set Borrow Controller for the following markets:
- INV
- wBTC
- wETH
- DAI
- sUSDe
- cbBTC
- sFRAX
- cvxCRV
- CRV
- COMP
- st-yETH
- st-yCRV
- CVX
- Inherit Parameters:
- Daily Borrow Limit
- Minimum Debt
- Staleness Threshold